I am claiming my girlfriend and her 2 kids in my return as dependents. She did not work last year but received the advance tax credit for the kids. Can I still claim her?

[thethirdjerry-ya]

How does this situation work?

[SweetieJean]

First, did they all live with you the entire year?   Second, any chance that the children's father is going to claim them?

[xmasbaby0]

Are the children your bio-children too?   Or are they your GF's children?   If they are not your own children you do not get the full child tax credit for claiming them nor do you get other child-related credits like earned income credit for claiming them.   You would only get the $500 credit for other dependents for claiming them.  You cannot claim them to file as Head of Household if they are not related to you.

And....did they all live with you for the WHOLE year?  Did your GF have less than $4350 of income not counting Social Security?   You say she did not work---but did she receive unemployment or any other income  (not the CTC).   

CREDIT FOR OTHER DEPENDENTS

https://ttlc.intuit.com/questions/4499708-what-is-the-500-credit-for-other-dependents-family-tax-cre...

Your GF might be better off filing a tax return and claiming her children as dependents on her own return in order to get the other part of the 2021 CTC.    And....did she already receive the 3rd stimulus check for claiming them?  If not, she can use the recovery rebate credit on her own 2021 return to get the stimulus amount.   If she is claimed as a dependent ---dependents are not eligible to receive stimulus money or any child-related credits. 

[Hal_Al]

Q. Can I still claim my girlfriend?

A. Yes, most likely (see full dependent rules*).  But you don't want to.  A dependent cannot have dependents of her own and she needs to claim her kids.

Q. Can I claim her kids?

A.  Yes, possibly (see full dependent rules*).  But you don't want to.  Three non-related dependents are only worth $1500 (max) to you, but $6000 (or more) to her (for 2021).

*See full dependent rules at: https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Ret...

There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit and student status test, a relationship test** and a residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. The Other dependent (qualifying relative) credit is worth (up to) $500 per dependent and is non-refundable.  That is, it can only be used to reduce an actual tax liability.

A person can still be a Qualifying relative dependent, if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:

1. Closely Related OR live with the taxpayer ALL year
2. His/her gross taxable income for the year must be less than $4350 (2021).
3. The taxpayer must have provided more than 1/2 his support

In either case:

4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. He must not be the qualifying child of another taxpayer

In addition to the above requirements, to claim your boy/girlfriend's children, they must meet all of the above requirements and:
--- your boy/girlfriend must not be required to file a return,
--- he/she does not file a return claiming the children

**The child may qualify as a dependent, but because he is not related, he cannot be a qualifying child for the earned income credit, child tax credit or Head of Household filing status.

[thethirdjerry-ya]

Yes they did. No their father will not be claiming them. Their mother did not work in 2021, but did receive the advanced child tax credit from July to December. 

[Hal_Al]

The advance child credit is new this year.  It brings up some new issues.  Here's some new info.  Essentially only opinions at this point:

Q. Does the girlfriend have to file a return because of the advance child tax credits.

A. Yes. Anyone who received advance Child Tax Credit payments is required to file for 2021.

Q. Does that disqualify the boyfriend from claiming the kids?

A. Yes.  They are not his qualifying children, so he would only be able to claim them as qualifying relatives. But she is required to file a tax return and they  are still her qualifying children, whether she claims them or not. So the boyfriend cannot claim them as qualifying relatives.

[Carl]

If you claim your GF as your dependent, then she can not claim any dependents of her own. She will also most likely have to pay back all of the advanced child tax credit money she received in 2021.

[Opus 17]

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@thethirdjerry-ya wrote:

Yes they did. No their father will not be claiming them. Their mother did not work in 2021, but did receive the advanced child tax credit from July to December. 

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The rules are different for 2021 than they would be in 2022 or were in the past.

For 2021, your girlfriend must file her own tax return, even if she has no income.  She will claim her children as dependents, and she will get the remaining amount of the child tax credit, even if she did not work.  You will NOT claim your girlfriend or the children as dependents.

This is because your maximum benefit for claiming your GF and 2 kids as dependents is $500 each, or $1500. Your GF's maximum benefit for filing and claiming her children is $6000 (or as much as $7200 if one or both kids is under age 5) minus the advanced payments she already received. 

Next year, the rules will be different, and you will need to evaluate your situation again under the laws that apply at the time.  But for 2021, what I described above is what will be happening.